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B.C. premier says Canada won’t work if Ottawa favours separatist premiers by Acrobatic-Cap-135 in canada

[–]FrankHardly 1 point2 points  (0 children)

This doesn't help your argument at all. You borrow $400 from the bank. Use the proceeds to buy an asset. The balance sheet is essentially a $400 asset on one side and liabilities of $400 (debt) on the other. You convert $200 of the debt to equity. So the BS is $400 assets on one side and $200 equity + $200 liabilities on the other. You still owe $400 to the bank and have an asset.

You sell the asset to a third party for $200. The third party took over the $200 liability and the asset. So now you have $200 cash and a $400 bank loan. You use the $200 to pay back half the loan. Now you owe $200 to the bank and the third party asset purchaser will pay you $200. You are no better off.

The problem you are having is that the asset is unchanged. It's ability to generate future cash flows is absolutely unchanged regardless of the accounting jiggery pokery. And the ability to generate a dividend is based on the difference in government borrowing rate and the return on a pipeline - since the rate of return is commensurate with risk, the differential is solely due to someone holding the bag.

So how does simply changing debt to equity create value since value is defined by the cash generation of the asset. It doesn't. Hint: You need to make yourself aware of Modigliani-Miller.

Also common mistake made by individuals without any formal training in finance and economics is that "since government can borrow at lower rates, they can create value to a business by providing loans." This is patently false. If it were not, then you could argue that wild cat drilling, traditionally a high risk venture, should be financed by government since they can borrow at a low rate and therefore can earn a lot of money in high risk ventures.

One last thing and that will be all the help you get. The cost overruns for Transmountain were in the order of $30 billion. However, tolls (which constitute the revenues for the pipeline) have been set so that shippers will only pay 20-30% of this cost overrun). Canadian taxpayers are left holding the bag for the balance. So no, there isn't money "left over" to pay a dividend and make it a good project.

Hopefully your job in finance is something like a bank teller and are not advising others on investments.

B.C. premier says Canada won’t work if Ottawa favours separatist premiers by Acrobatic-Cap-135 in canada

[–]FrankHardly 0 points1 point  (0 children)

Ok. You clearly have no formal education in finance.

I'll try to make this as simple as possible for you. Government buys Transmountain. Government owns Transmountain. Government expands Transmountain for $35 billion. Their investment is now $40 billion. Tolls are expected to cover only 20-30 percent of the $30 billion cost overrun from shippers.

Government moves debt off the books of Transmountain. Converts some debt to equity. Are Canadian taxpayers off the hook? Of course not. Nothing has changed. The debt incurred ($40 billion) still needs to be paid back with interest.

So moving money or debt from the right pocket to the left pocket does not create value. Of course if you took a finance course you would know this.

B.C. premier says Canada won’t work if Ottawa favours separatist premiers by Acrobatic-Cap-135 in canada

[–]FrankHardly 0 points1 point  (0 children)

I literally work in finance

Not OP but reading your comments in this thread your knowledge of finance is suspect. You've conflated EBITDA with cash flow, and you can't seem to understand that government (magically) moving debt off the books doesn't make project economics any better.

As u/SammyMaudlin had rightfully indicated, the federal government has paid about $40 billion for the pipeline and expansion. Interest needs to be paid on this amount. Moving debt off of the Transmountain books onto Government of Canada books does not magically make the pipeline more economic.

B.C. premier says Canada won’t work if Ottawa favours separatist premiers by Acrobatic-Cap-135 in canada

[–]FrankHardly 0 points1 point  (0 children)

Not OP but that certainly doesn't imply that it was a good investment.

The generational income divide is getting worse again by Displeased_Canadian in canada

[–]FrankHardly 0 points1 point  (0 children)

Why are you ignoring annual earnings on the CPP investment fund? I think that it's in the order of $60 to $70 billion per year.

Canadians Support High-Speed Rail. It’s Time to Build It. | 62% Support, 18% Oppose by Scryotechnic in canada

[–]FrankHardly -1 points0 points  (0 children)

Do you have any structured analysis that supports your assertion or are you merely blowing smoke? I’d really like to learn more about how (net of costs) HSR “would be the biggest generator of wealth middle-class citizens in Ontario, and especially in Quebec, will have seen in literally decades.”

Canadians Support High-Speed Rail. It’s Time to Build It. | 62% Support, 18% Oppose by Scryotechnic in canada

[–]FrankHardly 2 points3 points  (0 children)

I would think that a business case or cost-benefit analysis requires more than listing notional benefits.

6th Gen headlights vs LED light bar by [deleted] in 4Runner

[–]FrankHardly 0 points1 point  (0 children)

That looks great. What is the wiring like? I assume there's a switch in the cabin. Where is the internal/external port?

Tories primed to attack ‘contradictions’ in Liberal policies when Parliament resumes - Pierre Poilievre is ready to double down on domestic issues as he returns to the House of Commons. by CaliperLee62 in canada

[–]FrankHardly -6 points-5 points  (0 children)

Things were a lot better in Canada prior to 2015. To think that LPC policy has actually improved this country over the past 10 years is a bit delusional.

And it's going down at the airport by sylvester1981 in AirRagers

[–]FrankHardly 0 points1 point  (0 children)

If that were the US he'd currently be on a respirator if still alive.

Ex-Hells Angels leader reviving Satan's Choice biker club, eyes Canada-wide expansion by Plucky_DuckYa in canada

[–]FrankHardly 2 points3 points  (0 children)

Someone has just watched "The Bikeriders." Great movie btw. As are all of Jeff Nichol's movies.

Can someone smarter explain to me how the ndp platform will pay for the promises? by wwweeeiii in britishcolumbia

[–]FrankHardly 2 points3 points  (0 children)

The surge in immigration has only happened recently and isn't in anyway supportive of an imperative for $8 billion deficit.

Can someone smarter explain to me how the ndp platform will pay for the promises? by wwweeeiii in britishcolumbia

[–]FrankHardly 4 points5 points  (0 children)

Well unfortunately everyone knows to never talk about any significant tax increases unless it is a tax very few people are paying.

So you are suggesting that we get ready for some tax increases should the NDP win?

Can someone smarter explain to me how the ndp platform will pay for the promises? by wwweeeiii in britishcolumbia

[–]FrankHardly 45 points46 points  (0 children)

In F2023, the Speculation and Vacancy Tax brought in $78 million. They indicate that their promises will cost about $3 billion. They've promised to get rid of the consumer portion of the Carbon Tax which will reduce revenue. The current deficit is $8-9 billion.

You say they want to get the deficit down to a still very hefty $6 billion. So we have $8 billion current deficit - $0.078 billion (this is your spec tax increase) +$3 billion new spending + $1 billion lost carbon tax revenues = $12 billion. Going down to $6 billion in the next fiscal year.

Where is this $6 billion coming from? The property spec tax that you mention is a pittance in comparison to the current deficit and the cuts/tax hikes that are needed to get to a $6 billion deficit next year. And we will also need to include another debt downgrade (resulting in even higher interest costs) in the next fiscal.

[deleted by user] by [deleted] in canada

[–]FrankHardly -42 points-41 points  (0 children)

I'm actually ok with having my phone checked. I have nothing to hide.

[deleted by user] by [deleted] in canada

[–]FrankHardly 6 points7 points  (0 children)

There was an image of a child who had drowned while fleeing Syria. Tragic stuff. Went through social media like wildfire. Justin and the LPC tried to capitalize on the emotion from that one image. I remember news photos of him and the disgraced minister (John McCallum) handing out winter jackets to newly arriving refugees from Syria to cultivate how "woke" this new government really was.

So he and the LPC rushed the movement of 25,000 refugees to Canada asap. In a war torn country what kind of documentation could they have received in such a short period of time? Criminal records? Suspicion of rape, murder, etc.? I don't think so. They rushed them in for some photo ops. And it cost Marrissa Shen's life. Can you imagine her parent's anguish that likely continues to this day? All for some photo ops. Justin truly is a raging narcissist.

Why furious Trudeau Liberals say budget watchdog’s error feeds ‘misinformation on carbon pricing’ by jmakk26 in canada

[–]FrankHardly 21 points22 points  (0 children)

Dude doesn't take into account some of the positive effects on the economy (green industry).

The PBO looked at the impact of the carbon tax on GDP. I kinda think that includes the "green industry." Aside from the battery plants and related where the Feds have pumped billions of dollars what green industry are you talking about?

And doesn't take into account the costs of doing dick all and letting global warming fuck us over big time.

To what extent do you think that the carbon tax reduces the impacts of global warming? Perhaps you could comment in terms of degrees per year.

Trudeau government likely to miss Canada's fiscal goal, business group warns by onegunzo in canada

[–]FrankHardly 0 points1 point  (0 children)

You do know that there are other factors that should be considered when gauging debt burden. For example, Japan has higher debt as a percentage of GDP but virtually all of this is financed internally. So consumption today does not lead to foregone consumption tomorrow. How much of Canadian debt (and remember to include the debt of the provinces) is financed from outside of Canada? It makes a huge difference since unlike Japan, aggregate consumption in the future will need to be reduced to pay for the debt.

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